Grand Arcade JJB axe threat

JJB axe threat
JJB axe threat
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EMBATTLED JJB Sports may be forced to close the store in its own back yard as the firm fights for survival.

The flagship Grand Arcade outlet is on a list of 46 under-performing shops that will be shut if they don’t do more trade.

The fate of its Leigh counterpart, however, is already sealed. It, along with other nearby JJB outlets in St Helens and Bolton’s Middlebrook retail park, appears on a list of 43 shops to be shut down as the Martland Mill firm tries to avoid administration. Dozens of jobs will be lost at these stores alone and the company has had a presence in Leigh since the 1980s.

It used to be based in Lord Street but latterly has been in Bradshawgate. Its other outlet at the Parsonage Retail Park was taken over by DW Sports during a previous rescue plan.

The Grand Arcade outlet at least has a couple of years in which to pull its socks up, but it would be an embarrassing blow to the company to have to shut a key store in its home town.

The details of the underperforming stores earmarked for definite and possible closure appear in the Company Voluntary Arrangement (CVA) presented to store landlords by JJB yesterday.

The company has offered them a sweetener if they accept a deal which would see rents to the 89 stores cut by 45 per cent and paid in advance on a monthly rather than quarterly basis. Several landlords have already expressed concern but it is hoped the cash or shares incentive worth between £2.5m and £7.5m in April 2013 (depending on company performance) will ease the CVA through.

JJB, which employs 6,100, said the deal – its second CVA in as many years – is necessary to keep it from collapse as it struggles to compete with buoyant rivals JD Sports Fashion and Sports Direct International.

It said the CVA is part of a turnaround plan that will also involve the latest in a series of cash calls from investors to allow the business “to move forward on a far sounder footing”.

At the end of last month JJB raised £31.5m from its five biggest shareholders after raising £100m from investors last year. It plans to raise at least another £31.5m from shareholders by the end of June.

Chairman Mike McTighe said: “JJB’s restructuring plan is on track.

“In formulating these CVA proposals we have talked to our landlords and listened to their views. As a result, we are offering them a possible share in the value of a restructured JJB of up to £7.5m, payable in two years’ time.”